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Home / Futures Blog / Friday AM in Grain and Oilseeds 12/17

Friday AM in Grain and Oilseeds 12/17

December 17, 2021 by John Payne

Good morning

  • South Africa Hospitalization Rate Plunges in Omicron Wave– Currently there are about 7,600 people with Covid-19 in South African hospitals, about 40% of the peak in the second and third waves. Excess deaths, a measure of the number of deaths against a historical average, are just below 2,000 a week, an eighth of their previous peak. (Bloomberg)

  • Congress approves import ban targeting forced labor in China– Senators gave final congressional approval Thursday to a bill barring imports from China’s Xinjiang region unless businesses can prove they were produced without forced labor, overcoming initial hesitation from the White House and what supporters said was opposition from corporations. This is rubber meeting road when it comes to imports of processed cotton goods from China.  If you look at your shirt and see it was made in China, that manufacturer will now have to prove it was not processed in Xinjiang nor spun with cotton grown in Xinjiang.  Reminder, 4/5ths of Chinese cotton supply is grown in Western China where this is supposedly occurring. I think this was behind the limit up move yesterday in cotton.

  • We will begin to see new crop wheat trade as foreign governments start to book next year supply.  Jordan booked 60k last night for the price of $327 per MT.  This is cheaper than current offers (last traded in the 360’s) for old crop but well above what early buyers were paying at this time a year ago.  I look for new crop to find support.  Look at buying KC wheat on breaks as well as new crop Minneapolis (U22) as close to $9 as you can get it.

  • The route in the Turkish Lira continues. Consumer inflation rose more than expected to 21.31% in November, well above the central bank’s mid-point target of 5%, while producer prices rose the most in 19 years. The lira has lost near 50% of its value since the beginning of November. As I mentioned earlier this week, Turkey is the second largest importer of wheat and third largest importer of cotton in the world.

  • The hike in rates (it is early in this attempt to normalize) should weigh on the froth in the economy.  While I think this will weigh on commodities, the rising prices in both producer and consumer sectors should support price breaks. What I am talking about is more in the stock market in companies who do not generate profits and the crypto currency markets.  Specifically, the “stable coins” that are essentially backstopped by risk takers and nothing more. Watch dogecoin here.  “Doge” as the kids call it was started as a joke, now has a market cap 1/3 the size of Ford motor.  When margin calls hit (and they will), what gets sold first?

Anyone out there in the grain mechanizing business?  If so (or even if not!) feel free to take our new merch system “StoneHedge” for a spin. Click on the image below and fill out a demo request, no obligation.

https://insight.stonex.com/stonehedge_demo_request/

 

John Payne John Payne
866.825.8561 Toll-Free
312.706.7620 Local
312.706.7520 Fax
john.payne@stonex.com

Filed Under: This Week In Grain

About John Payne

John Payne is a Senior Futures & Options Broker and Market Strategist with Daniels Trading. He is the publisher of the grain focused newsletter called This Week in Grain, along with being a co-editor of Andy Daniels’s newsletter, Grain Analyst. He has been working as a series 3 registered broker since 2008.

John graduated from the University of Iowa with a degree in economics. After school, John embarked on a 4 year career with the United States Navy. It was during two tours in Iraq and the Persian Gulf where John realized how important commodities are to the survival of society as we know it. It was this understanding that brought about John’s curiosity in commodities. Upon his honorable discharge in 2007, John’s intense interest in the world of commodities inspired him to move to Chicago and pursue his passion in a career in the futures arena.

After a three year position with a managed futures firm specialized in livestock trading, he was given the opportunity to join the team at Daniels Trading. Being in the business and seeing how other IB’s operated, it was the integrity and straightforward approach of the Daniels management team and brokers that attracted him to make the move. Since joining Daniels, John has broadened his fundamental and technical analysis of the markets even further. John has been writing his newsletter This Week in Grain under the Daniels banner since 2011.

Working in high pressure industries like the military and capital markets, John has learned the value of preparation in times of stress. He believes that instilling within his clients the value of a good plan and a cool head for dealing with the day to day swings of commodity markets. He treats every client as a teammate, understanding that his job is to help clients achieve their goals, whatever they may be.

John is a proud supporter of the Iraq and Afghanistan Veterans of America, the Veterans of Foreign Wars and the National Corn Growers Association. When he is not working, he enjoys athletics of all kinds and spending time with his wife and their two kids.

John’s commentary is featured in the following publications:

* All Ag Radio – Sirius Channel 80
* AM 880 KRVN – Lexington, Nebraska
* RFD TV
* Wall Street Journal
* Barron’s
* China News Daily (English version)

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